Bill improves quality of corporate trustees' supervision

A bill that requires corporate trustees and certain statutory supervisors to be licensed was introduced to Parliament yesterday by Commerce Minister Simon Power.


The Securities Trustees and Statutory Supervisors Bill is intended to protect investors' interests and enhance market confidence by enabling the Securities Commission to hold trustees and statutory supervisors accountable for failing to perform effectively.


It will be an offence to act as a trustee or statutory supervisor without a licence.


The new regime will apply to trustees of debt securities, unit trustees, and statutory supervisors of certain collective investment schemes and retirement villages.


Retirement village statutory supervisors have been included in the regime in recognition of the similar role they play to trustees of investment products, in monitoring the financial position of retirement villages.


"I'm confident the new licensing regime will help ensure trustees and statutory supervisors are competent, and I believe this new regime will fundamentally improve trustees' performance," Mr Power said.


"The Securities Commission will administer the new regime, granting licensing applications and receiving mandatory reports from licensed trustees and statutory supervisors.


"The commission will have more powers to require information from trustees and to direct them to act in emergency situations."


The bill improves the accountability of trustees and statutory supervisors. The commission will be able to seek pecuniary penalties and compensation orders on behalf of investors against trustees and statutory supervisors which have breached their obligations.


The bill also makes it an offence for failing to comply with the commission's directions, which include providing information about the trustee or statutory supervisor or the issuer. Maximum penalties will range from $100,000 to $200,000.


The bill is expected to receive its first reading in the new year.